The floor sets a minimum effective rate. If your gain would otherwise be taxed above 30%, nothing changes - you pay your marginal rate. If your rate on the gain would fall below 30%, the floor tops it up to 30%. Critically, it is calculated on the gain itself, independently of the rest of your tax position. That removes a series of familiar strategies from the table:

• Realising in a low-income year no longer helps. Deferring a sale to a year when you expect a lower marginal rate will not get you below 30% on the gain.
• Large concessional super contributions no longer help. Catch-up contributions and the two-year contribution-reserving strategy can reduce your taxable income - but not the tax on the gain below 30%.
• Even substantial tax losses won't help. Carried-forward revenue losses and other deductions can shelter your other income, but the gain itself is still taxed at a minimum of 30%.

There is one important exception. People receiving means-tested income support - such as the Age Pension or JobSeeker - are exempt from the floor in any year they receive a payment. For them, the familiar strategies still work: realising in a low-income year, making deductible super contributions and applying tax losses can each reduce the tax on a gain, exactly as they do today.

First, the 30% applies to the net gain, not the headline figure. Indexation lifts your cost base, and capital losses still reduce the gain before the floor applies - so the base it bites on is smaller than the raw profit.

Second, the new regime applies to assets you already own. Growth accruing up to 1 July 2027 keeps the existing 50% discount under the transitional rules, but all growth from 1 July 2027 onwards - even on long-held assets - is caught.

The real levers now are indexation, capital losses and the timing of a sale relative to 1 July 2027 - not the income-shifting strategies that used to work.

Gains already accrued are protected

One of the biggest misconceptions is that owners must sell assets before 1 July 2027 to preserve the existing 50% CGT discount.

That is not generally correct.

For assets already held on 30 June 2027, the transitional rules separate:

• the gain accruing up to 30 June 2027; and
• the gain accruing from 1 July 2027.

The existing CGT rules, including the 50% discount where available, continue to apply to the gain accruing up to 30 June 2027. That gain is not taxed on 1 July 2027. It remains deferred until the asset is ultimately sold.

Only the growth accruing from 1 July 2027 is intended to be subject to indexation and the 30% minimum tax.

This means selling an asset prematurely simply to “lock in” the 50% discount may create unnecessary transaction costs and bring forward a tax liability without producing the expected benefit.

Valuations and record keeping

The new rules effectively reset the relevant value of assets around 1 July 2027. This may require a market valuation, although an alternative apportionment method is also being developed for certain assets.

There is no requirement to obtain a formal valuation before 1 July 2027. A valuation prepared now cannot establish what an asset will actually be worth immediately before that date.

The sensible approach is to:

• identify assets likely to require a valuation;
• preserve the records and information that will support that valuation; and
• obtain appropriate valuation advice after 1 July 2027 where required.

The proposed apportionment method may not be available for every type of asset, so further guidance is still needed.

Other important consequences

The reforms extend beyond investment properties. They potentially affect shares, business assets, cryptocurrencies, collectables, personal-use assets and interests in trusts.

Pre-CGT assets acquired before 20 September 1985 will also be brought into the CGT system for gains accruing from 1 July 2027. Gains accruing before that date remain protected, but the asset’s pre-CGT status will effectively end for future growth.

The rules also introduce a compulsory order for applying capital losses. Taxpayers will have less flexibility to choose which gains their losses offset, potentially reducing the value of the existing 50% discount on deferred gains.

The main-residence exemption itself has not been removed. However, complexity can arise where a home has been partly used to earn income, such as operating a business from home or renting out a room.

There are also unresolved interactions between the 30% capital-gains floor and rental losses from properties that remain eligible for negative gearing. Further amendments are expected before the regime is fully operational.